RFID: Contactless Payment Technology, Speed in Stores and Shops

The technological revolution we are living through has allowed us to create and develop systems that many would never have imagined, and which have changed the way we shop, carry out transactions and even relate to each other.

One of the things we do on a regular basis and almost unconsciously is to use the “contactless” chips that have been in credit cards for many years to pay for our purchases. On the other hand, it is becoming increasingly common to see payments using other RFID-based technologies, such as NFC (Near Field Communication), which is present in mobile phones, smartwatches, etc. In other words, not only is it no longer necessary to carry cash, it is no longer even necessary to carry a wallet.

They operate wirelessly using short-range waves and allow a transaction to be carried out simply by bringing the devices close together. But is the data exchange safe?

Security of wireless technologies

Cybercriminals seek to exploit security breaches and the functioning of these technologies for their own gain. As it is a completely wireless communication, the question arises whether intrusion into our transmission is possible. The answer is yes. In the case of NFC technology, it is true that the short operating distance can make fraudulent use very difficult, but it is a possibility that always exists. It is also possible to carry out relay attacks, which are much more complicated and which are explained in this Xataka article.

Although there is a possibility of such an incident occurring, it is very unlikely that it will happen, so the systems are quite secure. Reports of theft of contactless payment cards using a data phone are a hoax. It is very easy to identify the holder and the path the transaction has taken (the datafeed is a banking element with strong security controls and whose owners must provide their details) and therefore it is also easy to identify them.

What is really dangerous is that NFC technology is used to get the full card number and personal data of the cardholder. With this data, some websites allow online shopping and therefore a fraudulent purchase could take place. Measures have been taken and chips often do not share all information or have special data encryption on some of it to avoid exposing data, but even so preventing interaction between electronic devices in close proximity is relatively straightforward and easily solved.

We can block the RFID signals emitted by the cards with protective sleeves, disable NFC payments on our cards and devices, or even turn them off via the APP until we need to use them.

Similarly, we can also include multi-step verification (receive a code by phone to confirm purchase, have a pin for all types of transactions, etc.), or add layers of security to the device’s software. In addition, if you need to repair a device, do not hesitate to go to an Approved Repair Centre, which guarantees the use of original spare parts. This will prevent any possibility of intrusion.

NFC-RFID

And what exactly is RFID? Much more than a system for electronic payments.

As for RFID technology, its use goes much further and is present in many other sectors. The initials stand for “Radio Frequency Identification”, and it is basically a system that allows wireless communication between two devices, where one emits radio signals and the other responds according to the received signal. These radio waves can be read, tracked, located and interacted with in seconds.

The need to streamline and optimise processes has made RFID an important tool to be considered, and sectors such as logistics and retail have already successfully implemented it in the past.

In logistics there are a multitude of operational processes and movements that require an agile tool that allows total control of the information and quick access to it. Many of these processes are more efficient thanks to RFID.

For example, a receipt for goods. The operation is very simple. Labels or stickers with this small chip are attached to the products, which are read by a radio frequency system without the need to search or count the pallets, references or units one by one.

In other words, thanks to a scanner that reads the identification label, inventory can be carried out with a simple scan. This allows all this information to be managed without errors and without having to read each label individually, which saves time and costs, as well as minimising errors.

The comprehensive traceability offered by this technology has made it an essential tool for any company that needs to manage goods, control inventories and stocks, or simply collect and store information quickly and easily.

In eCommerce, the new, increasingly demanding consumer makes it necessary to “reinvent” the purchasing process, to make it simpler and faster every day. This forces companies to adopt new technologies to optimise and speed up the processes of stock control, shipping and collection, and although it is not an extremely new technology, RFID is perhaps one of the most powerful and most versatile.

RFID, the perfect ally

In short, it is a technology for capturing and transmitting information, remotely, without the need to directly view the tags or chips, with multiple identification and in capabilities, and with no determined orientation, allowing real-time reading.

This capability means that, today, RFID solutions have become a strategic element for the correct functioning of processes in e-commerce, logistics, commercial management, transport, storage control, the traceability any type of product. We have even seen RFID technology become the method of choice for many companies to record and monitor employee hours.

In terms of retail business figures, “A transformation in store”, the McKinsey report states that the introduction of automation and robotics technologies such as RFID for stock management or improvements in the warehouse, means that a retailer’s EBIT margin will increase by between 2% and 4%.

It is therefore a technology with a long way to go in the market, driven by other technologies such as the Internet of Things (IoT) and the digitisation of key sectors such as transport, industry and retail itself.

Specifically according to forecasts by market analyst Technavio , “the global market for RFID data capture and identification technology for industrial applications will grow at a weighted rate of 2.28% from 2018 to 2022”.

According to the report, the driving force behind the RFID market will be the expected increase in industrial applications using RFID as an enabler for IoT environments.

Optimisation of service, costs and time, as well as security and traceability. RFID technology has numerous attributes that make it an undisputed ally in digital transformation.